Rural hospitals integral to the health and wellbeing of communities throughout Oregon

Thursday, April 9, 2020

WASHINGTON, D.C. – Oregon’s U.S. Senator Jeff Merkley, along with a bipartisan group of 18 of his Senate colleagues, pushed the U.S. Department of Health and Human Services (HHS) to consider the needs of rural hospitals and hospitals with high percentages of Medicaid and Medicare patients as HHS distributes the $100 billion healthcare fund included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Senator Merkley has been in regular contact with rural and frontier health care providers throughout the pandemic, and has heard firsthand about how funding shortfalls are putting workers’ health and the quality of the care they can provide at risk.

In a letter to HHS Secretary Alex Azar and Deputy Secretary Eric Hargan, the senators urged the agency to execute an equitable distribution of funding from Public Health and Social Services Emergency Fund for small rural hospitals, critical access hospitals and other rural providers engaged in the COVID-19 pandemic.

“Last year rural hospital closures hit a record high, and 2020 is on pace to be even higher. So far this year we have had eight rural hospitals close, with several more on the brink. About 60 million people, nearly one in five Americans, live in rural areas and depend on their local hospitals for care,” the senators wrote. “Prior to the COVID-19 pandemic, rural hospitals were already operating on shoestring budgets, and with the cancellation of elective procedures, have a desperate and immediate need for more funding. Therefore, we request you make this funding available immediately to provide relief to our struggling health care providers.”

Without intervention, COVID-19 will close hundreds of rural hospitals across the country, and tens of thousands of rural patients will lose access to their nearest emergency room. The loss of revenue over the last few weeks, due to the inability to provide non-emergency care, is destabilizing core health services in rural America. Prior to the pandemic, nearly half of all rural hospitals were operating at a loss and rural closure rates were escalating dramatically. Today, these already financially fragile hospitals face catastrophic cash shortages. Many have furloughed staff, instituted massive cuts or are shuttering their doors.

The CARES Act increased funding for the Public Health and Social Services Emergency Fund by $100 billion in order to reimburse eligible health care providers for health care-related expenses or lost revenues that are attributable to COVID-19. Eligible providers are public entities, Medicare or Medicaid enrolled suppliers and providers, and other for-profit and non-profit entities designated by HHS. The law specified that funding be distributed on a rolling basis through “the most efficient payment systems practicable to provide emergency payment.”

We share significant concerns that the $100 billion provider fund will not be equitably distributed to small rural hospitals, critical access hospitals and other rural providers who are in grave need of help. We, therefore, ask that any formula to allocate this fund include the following metrics:

A 20 percent Rural Benchmark in the $100 billion provider fund. Without equitable formula guidelines, we believe it will be difficult for the rural providers to access the $100 billion provider grant program.

Priority should be granted to facilities that have been significantly affected by COVID-19 preparation. Rural facilities have lost 50 percent to 80 percent of revenue due to the elimination of non-emergency services as they prepare for a COVID-19 surge. Access to funds is critical. If they do not receive relief, most will close by the time the surge hits their rural community.

Priority should be granted for facilities that provide care for a disproportionally high percentage of Medicare and Medicaid patients.

Priority should be granted for facilities that provide care for populations with above average senior populations or co-morbidities that are particularly vulnerable to complications from COVID-19 and for populations in areas with limited access to health infrastructure.

Last year rural hospitals closures hit a record high, and 2020 is on pace to be even higher. So far this year we have had eight rural hospitals close, with several more on the brink. About 60 million people, nearly one in five Americans, live in rural areas and depend on their local hospitals for care. Prior to the COVID-19 pandemic, rural hospitals were already operating on shoe-string budgets, and with the cancellation of elective procedures, have a desperate and immediate need for more funding.

Therefore, we request you make this funding available immediately to provide relief to our struggling health care providers. We also request you provide Members of Congress with a personal briefing by teleconference on this matter no later than April 13, 2020.

Thank you for your attention to ensuring the health and well-being of patients in rural America. We welcome to opportunity to discuss your efforts addressing our concerns.